Medical cannabis regulators in Florida must establish a rulemaking process before blocking operators from utilizing third-party dispensing services, an appeals court ruled.
A three-judge panel of the 1st District Court of Appeal sided with Seattle-based Leafly, which filed a legal challenge in 2021 against the Florida Department of Health for banning such services.
The ruling allows Leafly and other e-commerce service providers to commence business, Orlando Weekly reported, and unlock a multiyear moratorium on this segment of the industry in Florida, a limited-license market dominated by multistate operators.
Leafly and similar third-party websites enable potential customers to view dispensary menus online, place orders and then pick them up.
Most, if not all, Florida MMJ operators stopped using such services in early 2001 after receiving warnings from regulators that they would be fined up to $5,000 per violation.
The health department claimed online marijuana e-commerce companies violated a state law banning third-party cannabis service providers, a position that sparked Leafly to file the legal challenge.
Leafly, like most publicly traded cannabis companies, is facing fundamental challenges to its business model as the industry has struggled to expand in several recreational and medical markets.
The company laid off another 40 employees, or 21% of its workforce, in March, one day before reporting its full-year and fourth-quarter financial results.
For 2022, Leafly posted a 10% revenue increase year-over-year to $47.4 million and a profit of more than $5 million.